In the next two years, about 6.5 million standard cubic meters per day of coal bed methane (CBM) could be produced by Essar Oil and Reliance Industries from their respective blocks.
This output is enough to generate about 1,573 mw of power, reports indicate. 1 mmscmd gas can generate 242 mw power, reports indicate.
According to the gas pricing formula approved by the Cabinet Committee on Economic Affairs, both Reliance and Essar will now be allowed to sell CBM. As per the decision, the formula will be applicable to all sources of gas including CBM from April 1, 2014. Reliance and Essar have been unable to develop their CBM fields owing to lack of the pricing approvals.
While Essar would produce from Raniganj CBM block next year, RIL would produce from its two blocks in Sohagpur in Madhya Pradesh the a year later. RIL is expecting 3.5 mmscmd of peak output from its two blocks.
Essar said its Raniganj block was close to moving to the commercial phase. We have drilled over 150 wells and are producing about 100,000 standard cubic meters of gas per day. This is expected to rise to 3 mmscmd by end of 2014.
Great Eastern Energy Corp (GEECL), India's first CBM producer, which is producing about 0.5 mmscmd gas from its Raniganj block, is also expected to raise the output to 3 mmscmd by 2017.